Why brands are pulling out of the Human Rights Campaign Corporate Equality Index

Lowe’s, Ford, Harley-Davidson, Tractor Supply Company, Jack Daniel’s marketer Brown-Forman, John Deere, Molson Coors and, most recently, Stanley Black & Decker, have all announced plans to scale back diversity, equity and inclusion initiatives. Their plans varied from scrapping supplier diversity goals to eliminating DEI roles and shifting the priorities of employee resource groups. But one common target is a more than two-decade-old program run by the Human Rights Campaign meant to assess companies for their treatment of LGBTQ+ employees. The Corporate Equality Index—which assigns companies scores for their policies, practices and benefits—had, until recently, been a fairly non-controversial system, with companies often touting their CEI scores in press releases. But the index, and LGBTQ+ policies more generally, have emerged as a talking point for conservative activist groups that have taken aim at policies such as those that allow transgender people to use bathrooms of their choosing and employee benefits that cover transition surgeries. Brands are increasingly caught in the crosshairs, most famously in the case of Bud Light, which dealt with an unprecedented sales slump after its 2023 partnership with transgender influencer Dylan Mulvaney drew ire from some conservatives. Also: What consumers think of DEI efforts and pullback Save John Deere, the companies recently confirming DEI pullbacks each indicated or implied they would no longer provide information to the Human Rights Campaign (HRC) for its surveys. John Deere didn’t respond to a request for comment clarifying if it will continue working with the organization. The HRC also wouldn’t state if John Deere ended the relationship. On Sept. 16, conservative activist Robby Starbuck posted that Stanley Black & Decker had also ended its participation with the CEI. When contacted for comment, the company referred Ad Age to an update CEO Don Allan shared with employees, which stated that the company was “ending our participation in all external culture surveys conducted by third-party organizations” to instead measure employee engagement internally. As companies disengage with pro-LGBTQ+ groups, including the HRC, they risk turning off younger consumers, and employees, for whom their future sales success may depend, according to experts. Detaching from the HRC’s index only makes sense for those minimally invested in Gen Z marketing, said Lisette Arsuaga, cofounder of the Association of National Advertisers’ (ANA) Alliance for Inclusive and Multicultural Marketing. “At a time when we are looking to potentially go into a recession, it’s crazy to not look at your potential of the greatest growth,” she said. In an October 2023 report, the ANA and Cultural Inclusion Accelerator found 77% of consumers would either immediately stop purchasing or look to purchase from other brands if a company backtracked on its support for social causes. Why brands are pulling back Among the eight brands Ad Age contacted for comment, only Tractor Supply Company, Brown-Forman and Stanley Black & Decker responded. Tractor Supply declined to comment. Brown-Forman pointed to its internal email announcing the changes to employees, which stated it ceased work with the HRC due to a shifting “legal and external landscape” in the U.S. Brown-Forman didn’t clarify what legal and external events encouraged its decision. Eric Bloem, VP of programs and corporate advocacy at the HRC, told Ad Age that the attacks on the CEI are part of a coordinated attack against businesses supporting the LGBTQ+ community. “Extremists are using businesses as pawns to advance their agenda,” he said. Brands may face backlash whether they take a political stand or not Starbuck, a write-in candidate in the 2022 Republican congressional primary in Tennessee and former Hollywood producer, has taken credit on social media for several brands announcing DEI retreats. His X posts often hone in on individual brands, some of which have DEI policies stretching back decades. Big news: Last week I messaged executives from @CoorsLight @MolsonCoors to let them know that I planned to expose their woke policies. Today they’re preemptively making changes.Here are the changes:• Ending participation in the @HRC’s woke Corporate Equality Index social… pic.twitter.com/RuOVb1IuNU— Robby Starbuck (@robbystarbuck) September 3, 2024 On Sept. 12, Starbuck called out the HRC and a host of brands and encouraged his more than 600,000 followers to “ask these companies why they’re associating with such naked hatred of their conservative customers.” It’s time to expose the @HRC. This is a must see video. Did you know that most major companies work with a group that calls Trump a "White nationalist" who "hates America" and many give this group MILLIONS as they work to legalize child sex changes and men in girls locker rooms?… pic.twitter.com/2kz4fj9foM— Robby Starbuck (@robbystarbuck) September 12, 2024 “No public company would similarly get in bed with or donate to a right-wing organization that mirrored the HRC’s views in the opposite direction,” Starbuck told Ad Age via email. “Customers and employees should not have to worry about their money ending up in the pockets of extremists who oppose their deepest values.” In 2020, Molson Coors’ Vizzy Hard Seltzer announced a $1 million donation to the HRC. It was part of a yearslong effort by the brewer to support LGBTQ+ groups, including one initiative called “Tap Into Change” that had donated portions of revenue sold at select locations to LGBTQ+ and HIV/AIDS non-profit organizations. Molson Coors did not respond to multiple requests for comment from Ad Age. While brands refuse to explain their disengagement from the CEI, Bloem suspects each is afraid of facing backlash in a tense political climate, as Bud Light did. “These decisions are made to relieve some of the pressure in the short term,” he said. “These are short-term, short-sighted, hasty decisions that, in the long term, may not work out for businesses.” What the CEI is and how it works The CEI is a benchmarking tool that assigns companies with at least 500 full-time employees a score up to 100 based on their policies, practices and benefits for LGBTQ+ employees. The HRC has altered how it evaluates companies since the CEI’s inception in 2002; the 2023-2024 report, released in November 2023, focuses on four main criteria. To start, businesses receive five points for having an employment non-discrimination policy that includes “sexual orientation” and “gender identity or expression” for all operations. Companies earn the bulk of their score, up to 50 points, in the second criterion for offering healthcare benefits inclusive of same-sex partnerships and transgender employees without exclusions for medically necessary care. Offering equal health coverage for trans employees is the single highest contributor to a company’s score, being worth 25 points, and includes mental health benefits, pharmaceutical hormone replacement therapies and coverage for reconstructive surgeries related to sex reassignment. The third criterion, worth up to 25 points, focuses on LGBTQ+ training, gender self-identification in data collection efforts, guidelines and implementation of gender-neutral restrooms and dress codes and the existence of an LGBTQ+ council or employee resource group. A company’s last 20 points come from evidence of external outreach and support to the LGBTQ+ community. Businesses can also lose up to 25 points for large-scale official or public participation in efforts that are harmful to the LGBTQ+ community. On Sept. 12, the HRC announced that Ford, Molson Coors, Tractor Supply Co., John Deere, Lowe’s, Harley-Davidson and Brown-Forman all had 25 points deducted from their 2023-2024 scores for their DEI rollbacks this summer. Despite brands disengaging, the HRC reported on Sept. 12 that it’s working with more than 1,400 companies on its 2025 report, which is a record for the organization. See all of the Global Automotive Marketing Awards winners here “In the 1990s, it was very cutting edge to say you were LGBTQ+ community supportive,” said Mike Wilke, founder of LGBTQ+ advertising advocacy group AdRespect. “Today, it’s a standard.” An agency built transgender empathy with a heartwrenching film AdRespect handles a database of ads running back nearly a century and offers best practices for advertising with the LGBTQ+ community based on how brands have done it for decades. For several years, it worked with the HRC on establishing a scoring system. According to Wilke’s records, several brands pulling back from DEI have invested in the LGBTQ+ community for decades. Brown-Forman’s Southern Comfort, Ford and Molson Coors all ran ads referencing queer relationships as far back as the mid-to-late ’90s. Uncoincidentally, all three companies had 100s in the 2023-2034 CEI before receiving a 25-point penalty. Stanley Black & Decker also had a 100. “Those that have been doing this a long time are going to potentially destroy decades of investment they’ve made into having a positive impression in the LGBTQ+ community,” Wilke said. “One of the many best practices around this is to show us a steady hand and not be wishy-washy on something as important as a person’s identity. It’s something they could be throwing away.” Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here For its last report, the HRC invited U.S. employers from the 2022 Fortune 1,000 and 2022 AmLaw 200 (the top 200 law firms by gross revenue determined by The American Lawyer), as well as private sector, for-profit companies that meet the minimum employee requirement, to submit an online survey detailing their policies. Those surveys serve as the organization’s primary resource for assigning CEI scores. The HRC has rated Fortune 500 companies regardless of their participation in the survey since 2002 and will continue to do so, Bloem said. The organization relies on publicly available information in tax filings, law and news reports and verifiable testimony to cross-reference completed surveys and fill in gaps for incomplete ones. It also recently set up an inbox where employees can anonymously share their experiences with discrimination and what inclusive workplace policies currently exist, which will inform future CEI scores. Still, the HRC admits it’s difficult to generate CEI ratings from public records alone. On its website, it encourages people to write emails expressing disappointment in Ford, Jack Daniel’s, Lowe’s, Tractor Supply Co., Harley-Davidson, Molson Coors and John Deere’s DEI retreat. HRC has also used its social channels to praise corporate leaders who publicly are sticking by DEI programs, including JPMorgan Chase CEO Jamie Dimon. Fortune 500 executives agree: Inclusion isn’t just the right thing to do — it’s good for business. Thank you!Take note @MolsonCoors, @Ford, and any other businesses abandoning their commitment to inclusion.➡️ https://t.co/VHymRccNmo pic.twitter.com/VK8DjBAxv6— HRC 🥥🌴 (@HRC) September 13, 2024 Participating in the CEI is often the first step brands take in engaging the LGBTQ+ community and can have a quantifiable impact on marketing, Bloem said. Half of the participants responding to an HRC survey released on Sept. 4 said that brands that scored 100 indicated they have strong support for the LGBTQ+ community. NextGen Marketing Summit Join us for a crash course on Gen Z, DTC marketing and the creator economy Register today “It’s a cue to LGBTQ+ consumers, who have $1.4 trillion in purchasing power … that they can direct their hard-earned dollars to businesses by buying products and services from those that support equality and have their backs,” Bloem said. The HRC has also served as a marketing advisor for brands such as OkCupid. In 2021, the dating app added additional genders and identities for users to display on their profiles in collaboration with the HRC. The following year, the organization helped OkCupid add definitions for those identities. The HRC also reviewed creative for OkCupid’s “Every Single Person” campaign to ensure it didn’t offend people belonging to various identities. OkCupid’s initiatives developed with various advocacy groups have directly contributed to growth periods, said Michael Kaye, head of brand and director of brand marketing and communications. New profile badges showing support for marriage equality, made with the American Civil Liberties Union, grew female registration to its highest in months while a badge showing support for reproductive rights made with Planned Parenthood boosted OkCupid’s Instagram followers by 20%. Initiatives in partnership with the HRC have similarly driven LGBTQ+ usership, Kaye said. “They have an opportunity to review all the creative, the messaging you’re seeing and to play a big role in being a collaborative partner,” he said.

Why brands are pulling out of the Human Rights Campaign Corporate Equality Index

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